The attorney for Gary Huddles, the former Baltimore County councilman indicted on charges of using $50,000 from his 1986 campaign funds to cover personal stock investments, says the prosecutor's action "suggests a vindictive, biased and ill-conceived prosecution."

Huddles' lawyer, Robert B. Schulman, took the offensive after the indictment was announced yesterday afternoon. Schulman issued a news release that questioned state prosecutor Stephen Montanarelli's motives in bringing up the case nearly five years after Huddles, whose political career was derailed by a link to the savings and loan scandal, retired from public life.

The indictment was based on an investigation by Montanarelli. Huddles was charged with theft, misappropriation of campaign funds and failing to pass the transactions through his campaign treasurer. He allegedly used the money to cover margin calls on his stock investments when the market crashed in October 1987.

Montanarelli declined to comment yesterday.

"All we can assume is that it is being done for some reason we don't have a handle on," Schulman said. ". . . or it's an attempt to raise the visibility of an office that has suffered a lackluster reputation."

In his release, Schulman said that for the state prosecutor to charge Huddles with violations "of admittedly vague and ambiguouslaws, knowing that the loan was fully disclosed and repaid with interest, suggests a vindictive, biased and ill-conceived prosecution."

The indictment says that between Nov. 6, 1987, and Dec. 21, 1987, Huddles drew four checks on his campaign account and deposited the $50,379 into his personal account with Signet Bank. He repaid the money to the campaign fund.

In early 1989, Huddles returned $30,000 of the $90,000 in his campaign treasury to contributors who requested refunds. The remaining $60,000 was donated to various charities, Schulman said.

Though he stressed that he would not discuss the Huddles case specifically, Jack Schwartz, chief counsel for opinion in the attorney general's office, said that in general terms, surplus campaign funds must be given back to those who donated them or can be donated to certain charities or schools.

Huddles, 52, who left office after 16 years on the council in December 1986, said he "would love to" comment on the indictment but he is deferring all questions to his attorney.

After an arraignment, Schulman said, he plans to file a motion seeking to dismiss the indictment. If denied, any trial probably wouldn't be held for at least several months, he said.

Huddles, who formerly represented the 2nd District covering Pikesville and Randallstown, raised $115,575 in 1986 with an eye toward running for county executive.

But his political career was ended by publicity about an unsecured $60,000 loan personally arranged for him by Jeffrey A. Levitt, the Old Court Savings and Loan president who was at the center of Maryland's savings and loan crisis and who is serving 30 years for stealing millions from depositors.

The June 1985 disclosure, and Huddles' acknowledgment that he had made no payments on the loan since 1982, came at a time when the Old Court scandal was a month old and hundreds of his constituents could not get their money. Huddles quickly repaid the entire loan, plus $24,900 in interest, within days of the disclosure, but the damage to his political career was irreversible and he retired from public life.